Value Added Tax

Module Outline

Reference:

Title IV, National Internal Revenue Code of 1997, as amended by RA 10963 (Sections
105-115)
Revenue Regulations 13-2018
TRAIN Veto Message of President Duterte
Revenue Regulations No. 7-95, as amended
Revenue Regulations No. 12-2003
Revenue Memorandum Circular No. 28-03
Revenue Regulations No. 20-2003
Revenue Regulations No. 1-2003 and 3-2003
Commentaries of De Leon/ Vitug and Acosta/Mamalateo

A. Concept of VAT

Definition

Essential Features of VAT

Constitutionality of VAT
Juan T. David vs. The Executive Secretary and the CIR (G.R. No. 115543,
August 25, 1994)

B. Persons Liable

Taxable Transactions

Taxable persons

Exemptions from VAT

Exempt persons

Exempt transactions

C. Tax on Goods and Properties

Concept of goods/properties

Requirements for taxability of transactions

D. Tax on Services
 Sale or exchange of services
Categories of services
Requirements for taxability of service transactions

E. Exempt Transactions

Categories of exempt transactions

1. Transaction Specific – viewed from the perspective of the transaction

itself.

2. Entity Specific-viewed from the perspective of the parties to the

transaction

F. Exempt Entities

G. Computation of Tax

Formula for calculating VAT

The taxable base

G. Rates of VAT

Ten Percent (10%)

Zero Percent (0%)

I. Effectively Zero – rated Transactions

Requisites for effective zero-rating

J. Tax Credits and Refunds

Input tax credit (Section 110)
Presumptive input tax (Section 111 (B))
Creditable withholding tax (Section 114 (C))
Payments of government agencies and GOCCs
Non-resident lessors
Transitional input tax (Section 111 (A))

Claims for refund and issuance of tax credit certificate (Section 112)

K. Compliance Requirements

Registration with the BIR (Section 236)

Record keeping requirements
Invoices and receipts (Section 113 A)
Filing of return and payment of tax (Section 114 (A) and (B))